Dr. Park, Sung Jun (Associate Research Fellow) has alleged that cryptocurrency is a form of asset, not a “currency”, thus it needs customized control and supervision accordingly, as well as interest in international implications of central bank digital currency (CBDC).
With the rapid digital transformation of the economy, the proportion of e-payments has drastically elevated and innovation has taken place, with the advent of distributed leger, blockchain, and of course, cryptocurrencies. Among cryptos, stablecoins attempt to offer price stability and are backed by a reserve asset, which thus might be used in regular payment system. Recently, lots of studies on the CBDC have been positively performed and published.
Based on these current trends and potential changes in a financial system, Dr. Park analyzed digital currencies and suggested policy directions our society should take in a place. According to his opinion, first, cryptocurrencies are in a form of asset, not “currencies”, thus they needs customized control and supervision accordingly, because that strong anonymity that most cryptocurrencies offer can serve as a simpler tool for crimes, such as money laundering, while international cooperation is widely believed to be essential for fights against money laundering and terrorist financing. Second, although it does not draw any attention in Korea yet, the stablecoins have no guarantees that they will work as designed but relatively higher risks of “runs”, whereby it is necessary to monitor stablecoins and relevant policies made by central banks in major counties and international organizations. Last but not least, he calls for attention to the international implication of the CBDC, because the CBDC has potential of leading to an innovative cross-border payment service, which requires attention from policy makers as there are many discussions about the impact of China’s digital yuan on the current dollar-centered international financial system.
“Economy has demonstrated sharply rapid digital transformation while the demand for cash continues to decline,” said Dr. Park. “This report covers cryptocurrencies, central bank digital currency and changes in the international financial system.”
> Future Research > Future Reports > Brief Reports